Allianz Harnesses AI and Record Inflows as Core Profit Surges to €3.8bn

Allianz posts record €4.5bn operating profit, plans AI investment from Indian JV sale, as asset management inflows cross €2tn and buyback supports shares.

The Allianz boardroom is turning its attention to the next lever of growth after a blockbuster start to the year. The German insurer posted a core net profit of €3.8bn in the first quarter, up from €2.6bn in the same period last year, and plans to channel a sizeable chunk of the proceeds from its Indian Bajaj joint-venture disposal into artificial intelligence. The goal: faster claims processing, lower costs and a more resilient underwriting margin.

Asset management delivered the standout performance, with Pimco and Allianz Global Investors pulling in net inflows of €45bn. Third-party assets under management have now crossed the €2tn threshold, a milestone that underscores the unit’s growing heft. Operating profit in the division climbed 6% to €857m — and would have risen 15% on a currency-adjusted basis had the dollar not dragged. The strong flow of fresh money is rebalancing the group’s earnings profile away from traditional insurance.

In property and casualty, operating profit advanced 11% to €2.4bn, helped by a benign period for large natural catastrophes. The life and health segment held steady at €1.4bn. Overall group operating profit hit a record €4.5bn, while the annualised core return on equity reached 24.2%, well above the year-ago level. Management is sticking to its full-year target of €17.4bn in operating profit.

The stock closed at €379.80 on Thursday, up 1.69% on the day. That puts the shares 2.43% higher over the past seven days but still 2.29% below where they started 2026. The 52-week high of €394.80 remains within reach, though the relative strength index of 71.1 points to an overheated short-term picture. The share is trading comfortably above its 50-day moving average of €370.35.

Analysts are broadly constructive. RBC Capital Markets lifted its forecasts on 14 May, citing good underlying momentum. The consensus of 18 analysts rates the stock a "buy" with a median price target of €402.58. Berenberg is the most bullish at €504. Earnings per share expectations stand at €17.10 for 2025 and €18.28 for 2026.

Capital returns add another layer of support. Allianz has launched a buyback programme worth up to €2.5bn, having already repurchased €300m worth of shares in the first quarter. The combination of record earnings and shareholder distributions underpins the investment case.

The next test for the shares will be whether the operational momentum can be sustained without the tailwind from the Indian divestment, and whether the AI push in claims handling can keep the combined ratio steady even when catastrophe losses pick up. The market has priced in a lot of good news, but the underlying earnings power looks solid.